In a surprise decision announced last night, General Motors‘ board has reversed course and decided to retain and restructure Opel.
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The company cited an “improving business environment for GM over the past few months, and the importance of Opel/Vauxhall to GM’s global strategy” as its key reasons for the decision.
“GM will soon present its restructuring plan to Germany and other governments and hopes for its favourable consideration,” said president and CEO Fritz Henderson.
“We understand the complexity and length of this issue has been draining for all involved. However, from the outset, our goal has been to secure the best long term solution for our customers, employee, suppliers and dealers, which is reflected in the decision reached. This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall’s long-term future.”
On a preliminary basis, the GM plan entails total restructuring expenses of about EUR3bn, significantly lower than all bids submitted as part of the investor bids.
GM said it would work with all European labour unions “to develop a plan for meaningful contributions to Opel’s restructuring. While Opel continues to outperform against its viability plan assumptions and immediate liquidity is stable, time is of the essence”.
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By GlobalData“While strained, the business environment in Europe has improved.” Henderson said. “At the same time, GM’s overall financial health and stability have improved significantly over the past few months, giving us confidence that the European business can be successfully restructured.
“We are grateful for the hard work of the German and other EU governments in navigating this difficult economic period. We’re also appreciative of the effort put forward by Magna and its partners in Russia in trying to reach an equitable agreement.”
Henderson added that GM also hoped to build on its already significant business in Russia and to resume work directly with GAZ to contribute to both the modernisation of its operations and the joint development of the Russian vehicle market on a mutually attractive basis.
See also: COMMENT: GM looks to the future over Opel/Vauxhall
